Garmin 2005 Annual Report Download - page 85

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55
Fiscal Year
The Company has adopted a 52–53-week period ending on the last Saturday of the calendar year. Due to
the fact that there are not exactly 52 weeks in a calendar year and there is slightly more than one additional day per
year (not including the effects of leap year) in each calendar year as compared to a 52-week fiscal year, the
Company will have a fiscal year comprising 53 weeks in certain fiscal years, as determined by when the last
Saturday of the calendar year occurs.
In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs,
and related financial activity. Therefore, the financial results of those fiscal years, and the associated 14-week fourth
quarter, will not be entirely comparable to the prior and subsequent 52-week fiscal years and the associated quarters
having only 13 weeks. Fiscal 2004 and 2003 included 52 weeks while fiscal 2005 includes 53 weeks.
Foreign Currency Translation
GARMIN utilizes the New Taiwan Dollar as its functional currency. In accordance with Statement of
Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, the financial statements of
GARMIN for all periods presented have been translated into United States dollars, the functional currency of
Garmin Ltd. and GII, and the reporting currency herein, for purposes of consolidation at rates prevailing during the
year for sales, costs, and expenses and at end-of-year rates for all assets and liabilities. The effect of this translation
is recorded in a separate component of stockholders’ equity. Cumulative translation adjustments of ($8,693) and
$12,075 as of December 31, 2005 and December 25, 2004, respectively, have been included in accumulated other
comprehensive gain/(loss) in the accompanying consolidated balance sheets.
Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date.
Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance
sheet date. All differences are recorded in results of operations and amounted to an exchange gain of $15,265, and
exchange losses of $24,819 and $6,699, for the years ended December 31, 2005, December 25, 2004, and December
27, 2003, respectively. The gain in fiscal 2005 was the result of strengthening of the United States dollar in the
latter half of the year. The losses in fiscal 2004 and 2003 were due to weakening of the United States dollar
compared to the New Taiwan Dollar throughout the year. These gains and losses are included in other income in the
accompanying consolidated statements of income.
Earnings Per Share
Basic earnings per share amounts are computed based on the weighted-average number of common shares
outstanding. For purposes of diluted earnings per share, the number of shares that would be issued from the exercise
of dilutive stock options has been reduced by the number of shares which could have been purchased from the
proceeds of the exercise at the average market price of the Company’s stock during the period the options were
outstanding. See Note 12.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, operating accounts,
money market funds, and securities with maturities of three months or less when purchased. The carrying amount of
cash and cash equivalents approximates fair value, given the short maturity of those instruments.